Apple's approach is going to be to maintain the current screen width, but increase the height. This will give the screen more retail estate in portrait mode (enough for an additional four icons on the Home screen). It will also make games and movies look much more impressive when the iPhone is held in landscape mode.

Want to know what that's going to look like? We've mocked up a new iPhone 5 display based on the new reported dimensions and applied it to one of the best mock-up renders around. Here's what the new iPhone will kind-of look like:

Pretty impressive stuff. Having an additional four icons on display makes the whole iPhone a lot busier. But with most users installing additional apps, and creating multiple folders, on an almost daily basis this will make organisation a little easier.

And here's the Home Screen in flat mode displaying all the icons:

So how's this going to work for current apps? Our understanding is that developers have a couple of options. They can redesign apps for the new display size (which is made easier by having the one dimension changing rather than both). They can also use a new iOS 6 development feature called Aut Layout which enables them to pin screen buttons and so on to layout positions on the screen, these will then move according to the device they are being used on.

Apps that aren't optimized for the new iPhone 5 display will potentially have black borders at the top/bottom (or left-right in landscape mode) and run just as before.